Hungary's Fidesz tipped to win big in Sunday vote

BUDAPEST, Hungary (AP) — Hungary's governing party is tipped to win parliamentary elections Sunday, while a far-right party is expected to make further gains, according to polls.

Prime Minister Viktor Orban's Fidesz party and its small ally, the Christian Democrats, are expected to win easily and they may even retain the two-thirds majority in the legislature gained in 2010 which allowed them to pass a new constitution, adopt unconventional economic policies, centralize power and grow the state's influence at the expense of the private sector.

Polls predict Fidesz will win around 45 percent to 50 percent of the votes, with a close race for second between a coalition of five left-wing groups led by Attila Mesterhazy and the Socialist Party — seen getting 25 percent — and the surging far-right Jobbik party which could receive up to 20 percent.

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THE CHALLENGERS

As Fidesz reminds voters every chance it gets, the Socialists are struggling to shake off their legacy as successors of the communist party, which ran Hungary with Soviet support until 1990, and their calamitous rule between 2002 and 2010 that took the country to the brink of bankruptcy.

In 2010, Jobbik got 16.7 percent of the ballots by appealing mainly to rural voters facing high unemployment and conflicts with their Roma neighbors — the country's largest and generally poorest minority. Now, Gabor Vona's party, which would prefer to see Hungary leave the European Union it joined in 2004, has toned down its anti-Roma and anti-Semitic statements, released photos of its politicians posing with pets and is trying to attract Hungarians fed up with the corruption and aloofness associated with the mainstream parties.

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NEW VOTING SYSTEM

Fidesz has introduced a new electoral system which cuts the number of lawmakers from 386 to 199, has no runoff votes and extends voting rights to hundreds of thousands of ethnic Hungarians with dual citizenship living in neighboring countries. At the same time, it tilts results toward the leading candidates — which could allow Fidesz to keep its two-thirds majority with less than 50 percent of the votes — restricts parties' political ads but does not limit government propaganda, while a much-needed reshaping of voting districts because of population shifts has been used by Fidesz for gerrymandering.

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ORBAN'S REFORMS

The Orban government compared Hungary's financial vulnerability in 2010 to the crisis in Greece. Still, it decided to forego a new deal with the International Monetary Fund — which led a bailout of 20 billion euros (then $26 billion) in 2008 — so it could nationalize $14 billion in assets administered by private pension funds, impose windfall taxes on banks, numerous industries and services and enforce utility cuts for all households.

Other policies include a flat income tax rate of 16 percent, tax benefits for families and a public works program which has been crucial in lowering the unemployment rate to 8.6 percent in February from 11.3 percent in mid-2010.

Low domestic demand and the utility cuts have helped cut inflation to just 1.7 percent in 2013 from 4.9 percent in 2010.

The state budget deficit has been kept below EU standards, while Hungary's debt level is down from 82 percent of gross domestic product in 2010 to 78 percent last year. But growth is middling and investments are often being delayed, partly because of the high taxes on businesses and the lack of predictable and sustainable economic policies.

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FRIENDS IN HIGH PLACES

Fidesz has defended companies owned by government cronies which have reaped generous state contracts and the two-thirds majority has given Orban a free hand and an iron fist to place close allies at institutions which oversee everything from Hungary's media to its judicial system.

Parliament has also overruled the Constitutional Court on several issues, including homeless policies, the campaign ad restrictions, the recognition of churches and education reforms.

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THE PRICE OF CONTINUITY

Orban's plea for four more years appeals to many voters, like retiree Zsolt Papp.

"Should we go back to the starting line? We should not," Papp said. "We should continue and go on."

Analysts, however, warn about the potential hazards posed by a third Orban term, especially if Fidesz retains its super majority.

"Its economic policies will remain highly unpredictable and hurt investment sentiment," said Blanka Kolenikova of IHS Country Risk in London. "A simple majority would be perhaps more beneficial — assuring overall government stability with a larger opposition providing a stronger democratic balance to Fidesz-imposed laws."